Eastern Shipping Lines v. CA, G.R. No.

97412 (1994)

ISSUE: WON a claim for damage sustained on a shipment of goods can be a

solidary, or joint and several, liability of the common carrier, the arrastre
operator and the customs broker

PARTIES:

Petitioner: Eastern Shipping Lines, Inc. (common carrier)

Respondent:

o Hon. Court of Appeals

o Mercantile Insurance Company, Inc.

Arrastre operator: Metroport

Broker: Allied Brokerage

FACTS: 2 fiber drums of riboflavin were shipped from Yokohama, Japan or

delivery vessel 'SS EASTERN COMET' owned by Eastern Shipping Lines under
a Bill of Lading No. YMA-8. The shipment was insured under Mercantile
Insurance Company's Marine Insurance Policy.

Upon arrival of the shipment in Manila, it was discharged unto the custody of
the Metro Port Services, Inc. The latter excepted to one drum, said to

be in bad order, which damage was unknown to the insurance company.

Allied Brokerage Corporation received the shipment from Metro Port Service,
Inc., one drum opened and without seal (per 'Request for Bad Order
Survey'). It then made deliveries of the shipment to the consignees'
warehouse. The latter excepted to one drum which contained spillages, while
the rest of the contents was adulterated/fake (per 'Bad Order Waybill' No.
10649).

MERCANTILE INSURANCE’S CONTENTION: Due to the fault and negligence of

Eastern Shipping, Metroport, Allied Brokerage, the consignee suffered
losses/damage, sustained by said drum, totaling P19,032.95.

Claims were presented but they failed and refused to pay the same. Thus,
the insurance company was compelled to pay the consignee P19,032.95
under the
afore-stated marine insurance policy, so that it became subrogated to all the
rights of action of said consignee against the 3 companies mentioned.

ARGUMENTS:

EASTERN SHIPPING: The shipment was discharged in good order from the
vessel unto the custody of Metro Port Service so that any damage/losses
incurred after the shipment was incurred after the shipment was turned over
to the latter, is no longer its liability

METROPORT: Although the shipment was discharged unto its custody,

portion of the same was already in bad order

ALLIED BROKERAGE: Mercantile Insurance company has no cause of

action against it, not having negligent or at fault for the shipment was
already in damage and bad order condition when received by it, but
nonetheless, it still exercised extra ordinary care and diligence in the
handling/delivery of the cargo to consignee in the same condition shipment
was received by it.

RTC: The losses/damages occurred before the

shipment reached the consignee while under the respective and/or
successive custody and possession of the carrier (Eastern), arrastre
operator (Metro Port) and broker (Allied Brokerage). Under Art. 1737 of the
New Civil Code, the common carrier's duty to observe extraordinary
diligence in the vigilance of goods remains in full force and effect even if the
goods are temporarily unloaded and stored in transit in the warehouse of
the carrier at the place of destination, until the consignee has been advised
and has had reasonable opportunity to remove or dispose of the goods (Art.
1738, NCC). Trial court ordered (Eastern, Metro Port, Allied Brokerage) to
pay Mercantile Insurance, jointly and severally.
CA: affirmed in toto the judgment of the court a quo

SC: In Fireman's Fund Insurance vs. Metro Port Services, SC explained in holding the
carrier and the arrastre operator liable in solidum, thus:

"The legal relationship between the consignee and the arrastre operator is
akin to that of a depositor and

warehouseman. The relationship between the

consignee and the common carrier is similar to that of
the consignee and the arrastre operator. Since it is the duty of the
ARRASTRE to take good care of the goods that are in its custody and to
deliver them in good condition to the consignee, such responsibility also
devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are
therefore charged with the obligation to deliver the goods in good condition
to the consignee."

We do not, of course, imply by the above

pronouncement that the arrastre operator and the

customs broker are themselves always and necessarily
liable solidarily with the carrier, or vice-versa, nor that attendant facts in a
given case may not vary the rule. The instant petition has been brought solely by
Eastern Shipping Lines which, being the carrier and not having been able to rebut the
presumption of fault, is, in any event, to be held liable in this particular case. A factual
finding of both the court a quo and the appellate court, we take note, is that
"there is sufficient evidence that the shipment sustained damage while in
the successive possession of appellants" (the herein petitioner among
them). Accordingly, the liability imposed on Eastern

Shipping Lines, Inc., the sole petitioner in this case, is inevitable regardless
of whether there are others solidarily liable with it.